Monday, February 8, 2016

Immigration: Legal vs. Illegal

Immigration is a central question for national and international politics during the end of the twentieth century and the beginning of the twenty-first.

In the United States, this question takes the form of analyzing the distinction between ‘legal’ and ‘illegal’ immigration. It is a question of law, and of knowing and deliberate violation of the law.

Legal immigrants are, by definition, welcome in the United States. They contribute to the economy and pay their prescribed taxes. They can eventually become full citizens.

Illegal immigrants are criminals, because they have understood the rules beforehand, and have chosen to break those rules. They pay fewer taxes and are therefore not fully supporting the system from which they draw significant social benefits.

The political controversies emerge when people use the word ‘immigrant’ without clearly stating whether they are referring to legal or illegal immigrants.

The example of California is instructive. In 1994, the state had between 1.3 and 2 million illegal immigrants. The exact number is, of course, difficult to determine, because illegal immigrants are constantly working to conceal the fact that they have violated the law.

In that year, California’s voters approved Proposition 187, which was designed to ensure that legal immigrants received social benefits, and to ensure that illegal immigrants did not take those benefits from the legal immigrants.

Because 1994 was a statewide election year, the voting on Proposition 187 was linked with the voting on candidates for various statewide offices. An editor for the University of Michigan’s Michigan Law Review writes:

In 1994, Governor Pete Wilson of California pulled off an amazing come-from-behind victory by tethering himself with titanium cords to Proposition 187, which prohibited illegal aliens from collecting public services. Wilson went from a catastrophic 15 percent job-approval rating to a landslide victory. Suddenly he was being touted as presidential material.

Unrelated the California’s Proposition 187, but related to the topic of immigration, journalist Martin Wolf, writing for the Financial Times, reports that

The share of immigrants in populations has jumped sharply. It is hard to argue that this has brought large economic, social and cultural benefits to the mass of the population.

Note that immigration itself is not harmful to national economies, but illegal immigration does serious damage. Legal immigration has beneficial effects, but illegal immigration is a major problem facing various world governments in the early twenty-first century.

Monday, January 18, 2016

Why the Government Wants You to Pay More for Your Groceries: Radical Distortions of Natural Market Forces

In mid-2015, Shandra Martinez reported about an ongoing legal action. A regional grocer, Meijer’s, was suspected of selling food at prices which the government deemed “too low.”

This seems, to say the least, counterintuitive, especially at a time when the national economy had been sluggish for several years. Is it such a bad thing for consumers to get a good deal on groceries?

To be sure, there have been well-intentioned arguments for minimum prices: to avoid, e.g., “dumping” by which a large retailer can drive smaller retailers out of the market, only to dramatically raise prices once the competition has been eliminated.

But if such a tactic ever worked, it would certainly not in a market as liquid and active as consumer groceries.

Yet the government practice of setting minimum prices for various retail items remains a widespread practice. Shandra Martinez writes:

Meijer's recent opening of two Wisconsin stores has led to a state investigation to determine if the Midwest retailer violated a Depression-era law that keeps products from being sold below cost.

Products reported to be priced too low range from 28-cents a pound bananas to a $1.99 gallon of milk.

From beverages to fuel, price controls set minimum prices for a wide range of products. When competition would drive prices lower, the government steps in to stop prices from dropping.

Arguments are made that this regulatory intervention protects various industries. If this were true, it would ironically be foreign industries receiving protection from American governments, because in many cases, the goods so regulated are imported.

The minimum prices, however, often fail to protect industries, and in fact prevent them from expanding. Lower prices would lead to increased production, higher employment, and more net income to the manufacturer.

Both from the perspective of common sense, and from the perspective of technical economics, government-mandated minimum prices for retail goods serve only to force the consumer to pay more. The practice of legislated minimum prices creates inefficiencies in which selected “crony” companies can generate abnormally high incomes enabled by government favoritism.

The removal of government price controls benefits consumers and producers alike, strengthening the overall economy.

Sunday, January 17, 2016

Rising Wages, Sinking Families: the Paradoxes of Income

Despite economic “hard times” in the 1970s, when the U.S. economy was hit separately but simultaneously by inflation and by the Arab Oil Embargo, and in early 2010s, statistics still show long-term growth in real wages, as Charles Murray notes:

In the 1960 census, the mean annual earnings of white males ages 30 to 49 who were in working-class occupations (expressed in 2010 dollars) was $33,302. In 2010, the parallel figure from the Current Population Survey was $36,966 — more than $3,000 higher than the 1960 mean, using the identical definition of working-class occupations.

Alternatively, the same trend can be quantified as a rising standard of living. During that period, 1960 to 2010, the percentage of households possessing the following items increased: televisions, color televisions, microwave ovens, DVD (previously VCR) devices, cell phones, electric garage door openers, personal computers, smart phones, etc.

In any case, we can mark that fifty year period as a time of net economic gain: which means we can use this half-century as social specimen of what happens to a population when prosperity increases.

This occurred despite the decline of private-sector unions, globalization, and all the other changes in the labor market. What's more, this figure doesn't include additional income from the Earned Income Tax Credit, a benefit now enjoyed by those making the low end of working-class wages.

At one time, demographers often accepted the hypothesis that higher income rates led to higher marriage rates. Accordingly, they made few or no policy recommendations to directly increase the marriage rate. Instead, they assumed that improvements in the economy would automatically fix social problems like low marriage rates.

Perhaps, at some point in the past, that hypothesis was true. But, as Charles Murray points out, the last few decades have yielded numbers which have created great doubt about this conjecture:

If the pay level in 1960 represented a family wage, there was still a family wage in 2010. And yet, just 48% of working-class whites ages 30 to 49 were married in 2010, down from 84% in 1960.

If the hypothesis which linked rising wages to a rising marriage rate is not true, then the question arises about which causal relations, if any, exist between income levels and marriage rates. Additionally, the question arises about whether there are other factors, economic or noneconomic, which might determine marriage rates.

A second hypothesis had predicted that rising wages would cause rising participation in the labor force. Better wages, it was assumed, would lure more workers into the workplace. But this hypothesis also showed itself to be questionable.

What about the rising number of dropouts from the labor force? For seven of the 13 years from 1995 through 2007, the national unemployment rate was under 5% and went as high as 6% only once, in 2003. Working-class jobs were plentiful, and not at the minimum wage. During those years, the mean wage of white males ages 30 to 49 in working-class occupations was more than $18 an hour. Only 10% earned less than $10 an hour.

Contrast the average real wage in the period from 1995 to 2007 to the wage from 1960:

If changes in the availability of well-paying jobs determined dropout rates over the entire half-century from 1960 to 2010, we should have seen a reduction in dropouts during that long stretch of good years. But instead we saw an increase, from 8.9% of white males ages 30 to 49 in 1994 to 11.9% as of March 2008, before the financial meltdown.

In the face of the failure of these two hypotheses, statisticians, economists, and demographers had to explain why rising wages didn’t trigger an increase in workforce participation and an increase in the marriage rate.

If changes in the labor market don't explain the development of the new lower class, what does? My own explanation is no secret. In my 1984 book Losing Ground, I put the blame on our growing welfare state and the perverse incentives that it created. I also have argued that the increasing economic independence of women, who flooded into the labor market in the 1970s and 1980s, played an important role.

There are, however, alternatives to Charles Murray’s interpretations. The question is why rising wages didn’t have the anticipated social effects. But from a different perspective, perhaps the wages didn’t really rise.

Although Murray’s numbers, as quoted above, seem to indicate an increase in wages, his numbers also show an increase in single-parent households, whether through divorce or through illegitimacy. Unwed motherhood erodes the expanded purchasing power expected from nominally rising wages.

When parents do not live together with their children, the need arises to sustain two households. If mother and father do not live permanently in the same dwelling, then there is a need for two stoves, two refrigerators, two furnaces, two lawnmowers, etc.

This redundancy is very expensive, nearly doubling the cost of living. So if wages rise at the same time that single-parent families arise, then the latter number will to some extent counteract the former.

With more women in the workforce, single mothers were often able to maintain themselves financially. So the average standard of living across the population was able to sustain itself and even increase.

This increase in standard of living was, however, achieved very inefficiently, because for each working single mother, there was a corresponding male either working or potentially in the workforce. Had the two of them joined forces, the standard of living would have risen even faster, and with less work.

These inefficiencies arise when there are two parallel households when there should be one. Then net cost to individuals and to societies is significant.

Charles Murray examines the cultural factors behind the increase in single-parent households, whether through divorce or through unwed motherhood:

Simplifying somewhat, here’s my reading of the relevant causes: Whether because of support from the state or earned income, women became much better able to support a child without a husband over the period of 1960 to 2010. As women needed men less, the social status that working-class men enjoyed if they supported families began to disappear. The sexual revolution exacerbated the situation, making it easy for men to get sex without bothering to get married. In such circumstances, it is not surprising that male fecklessness bloomed, especially in the working class.

In the early twenty-first century, these cultural factors are powerful influences in society. Culture seems to trump economics, not the other way around:

I barely mentioned these causes in describing our new class divide because they don't make much of a difference any more. They have long since been overtaken by transformations in cultural norms. That is why the prolonged tight job market from 1995 to 2007 didn't stop working-class males from dropping out of the labor force, and it is why welfare reform in 1996 has failed to increase marriage rates among working-class females. No reform from the left or right that could be passed by today's Congress would turn these problems around.

The disclaimer needed when examining these trends is, of course, that we are dealing with averages and trends. There are exceptions: widowhood is, for example, almost never by choice.

Physical disability is another important exception.

But as percentages in the general population, these exceptions are small segments, and the general trends are not affected by them.

As single mothers have proven themselves more adept and creative at sustaining themselves and their children in single-parent households, the corresponding males, who are on average not supporting any children, find it easier to support themselves with little or no constructive economic activity.

Society has created a giant loophole, an easy way out, for men who father children, abandon them, and then live easily without contributing to the economy, to their children, or to the mother of their children. They are allowed to act irresponsibly.

The prerequisite for any eventual policy solution consists of a simple cultural change: It must once again be taken for granted that a male in the prime of life who isn't even looking for work is behaving badly. There can be exceptions for those who are genuinely unable to work or are house husbands. But reasonably healthy working-age males who aren’t working or even looking for work, who live off their girlfriends, families or the state, must once again be openly regarded by their fellow citizens as lazy, irresponsible and unmanly. Whatever their social class, they are, for want of a better word, bums.

The use of the word ‘responsible’ is central to Murray’s argument here. For many people, the word or the concept it represents need not be invoked: they are naturally inclined to contribute to their families and to society.

But there is a large enough segment of the population - and especially of the male population - which needs some external encouragement to seek and maintain employment, and to support their families, that it is necessary to provide structures which incentivize socially constructive economic behavior.

Saturday, January 9, 2016

AIDS and Politics: Reagan Seeks a Cure

Under the headline “Reagan Defends Financing for AIDS,” the New York Times stated, in the words of reporter Philip Boffey, that President Ronald Reagan and

his Administration was already making a ''vital contribution'' to research on the disease.

The Times article appeared in September 1985. This was relatively early in the history of the disease, which had been utterly unknown only several years before. Early in Reagan’s first term in office,

he had been supporting research into AIDS, acquired immune deficiency sydrome, for the last four years and that the effort was a “top priority” for the Administration.

Reagan encountered some resistance for directing both funding and attention to the illness. But he “publicly addressed the issue of the lethal disease that has claimed thousands of victims, primarily among male homosexuals, intravenous drug addicts,” and other high-risk demographic segments.

Reagan’s opponents were concerned about sending large amounts of taxpayer dollars to various types of medical research. They argued that, while AIDS was subject to therapy, management, and treatment, it would be misleading to raise hope of an actual ‘cure.’

Nonetheless, Reagan’s “administration had provided or appropriated some half a billion dollars for research on AIDS since he took office in 1981.”

Reporting about Reagan’s effort to find help for those who suffered with the disease, Carl Cannon writes about Reagan’s meetings with people like

Los Angeles gay activist David Mixner, a friend of future president Bill Clinton. “Never have I been treated more graciously by a human being,” Mixner said of his meeting with Reagan.

As a former Hollywood actor, Reagan was a friend of Rock Hudson, who was dying of the disease. Although Reagan was advocating for AIDS funding,

it was Hudson who wouldn’t discuss AIDS; Reagan actually mentioned the disease publicly for the first time two weeks before his friend passed away.

Reagan had been addressing AIDS since early in his first term in office. By the beginning of his second term, he was becoming more vocal on the topic.

Although some opponents claimed that he never mentioned sickness until he’d already been in office for seven years, he had in fact addressed it clearly and repeatedly several years earlier.

Reagan first mentioned AIDS, in response to a question at a press conference, on Sept. 17, 1985. On Feb. 5, 1986, he made a surprise visit to the Department of Health and Human Services where he said, “One of our highest public health priorities is going to be continuing to find a cure for AIDS.” He also announced that he’d tasked Surgeon General C. Everett Koop to prepare a major report on the disease. Contrary to the prevailing wisdom, Reagan dragged Koop into AIDS policy, not the other way around.

But more than speaking early and often about the matter, Reagan consistently provided a budget for it.

The administration increased AIDS funding requests from $8 million in 1982 to $26.5 million in 1983, which Congress bumped to $44 million, a number that doubled every year thereafter during Reagan’s presidency.

Nor did Reagan shy away from direct involvement in the matter. Carl Cannon notes that, “in 1983, early in the AIDS crisis,” Reagan’s “HHS Secretary, Margaret Heckler,” with Reagan’s approval,

went to the hospital bedside of a 40-year-old AIDS patient named Peter Justice. Heckler, a devout Catholic, held the dying man’s hand, both out of compassion and to allay fears about how the disease was spread.

“We ought to be comforting the sick,” said Ronald Reagan’s top-ranking health official, “rather than afflicting them and making them a class of outcasts.”

“I’m delighted she’s here,” Justice said. “I’m delighted she cares.”

Peter Justice and other AIDS patients like him appreciated Reagan’s sincere desire to support and help them.

Because of Reagan’s efforts, significant progress has been made in managing the disease with various therapies, treatments, and medications. There is reason to expect more progress in the future. A true ‘cure,’ however, remains unlikely.

Since that time, substantial progress and meaningful help has been developed for AIDS patients. Ironically, not much came of the federally-funded efforts, during Reagan’s administration or under later presidents. The most effective medications, treatments, and therapies were developed outside the government in private-sector research.

Nonetheless, Reagan’s efforts were laudable and demonstrated an ethical attempt to render assistance to those who were suffering.

Wednesday, December 23, 2015

The 1950s: Decade of Progress

It is difficult and dangerous to make generalizations about a decade. Statistically, each ten-year period will have outliers and counter-trends within trends.

One can make an interesting argument, however, that the 1950s was one of the best decades in United States history for African-Americans.

In the 1950s, Blacks didn't have the massive unemployment numbers they have now. A greater percentage of them registered to vote and did vote.

A greater percentage of their children were born to an intact married couple. Public schools, various means of transportation, and most workplaces were being desegregated.

African-Americans had higher literacy rates.

Over the course of the twentieth century, Black populations became increasingly concentrated in inner-city neighborhoods. The problems which we now associated with urban life were less acute in the 1950s.

Fewer African-Americans committed crimes, fewer were arrested, fewer were convicted of crimes, and fewer were incarcerated. Their use of illegal drugs, and their abuse of legal ones, was much less.

It was after the 1950s, between 1960 and 2015, that life in the ‘ghetto’ became measurably characterized by unemployment, poverty, crime, drug abuse, and single parent families.

Life was not perfect in the 1950s. There were real problems and real tensions in race relations.

But in the 1950s, Blacks made progress. This decade was ‘the civil rights era.’

The 1950s saw the final and permanent end to the horrific practice of lynching. The last recorded lynching was in 1955. There were zero after that, and zero in 1952, 1953, and 1954.

During those same years, Rev. Martin Luther King led the Montgomery bus boycott and founded the SCLC.

A young African-American man was more likely to complete high school and get a job in the 1950s than in the year 2015.

The Supreme Court issued its landmark Brown vs. Board of Education decision in 1954. President Eisenhower sent federal troops to ensure that the “Little Rock Nine” were able to obtain an education based on that Supreme Court decision.

Eisenhower also pushed the 1957 Civil Rights Act through Congress and signed it into law. He ensured that troops in the United States Army were fully integrated, moving President Truman’s symbolic Executive Order 9981 into reality.

All of these steps worked to crumble the “Jim Crow” laws, and the culture built around them.

America’s large cities were then more integrated than in the year 2015.

Life in the 1950s was not perfect. America had not solved all of its race-related problems. But there was an increasing sense of liberty, opportunity, and safety among Blacks - more than in previous decades, and sadly, more than in subsequent decades.

Thursday, December 3, 2015

Eisenhower Appoints African-Americans

President Eisenhower took office in January 1953, at the beginning of a decade which would see the emergence of the African-American civil rights movement onto the stage of the national media. That movement would achieve great things during this decade, and “Ike” Eisenhower was a part of that accomplishment.

Among Eisenhower’s achievements was the appointment of Jesse Ernest Wilkins. Born in 1894, Wilkins was the first African-American to be appointed to a sub-cabinet level. On March 5, 1954, the New York Times praised Ike’s choice:

President Eisenhower’s nomination of J. Ernest Wilkins to be Assistant Secretary of Labor for International Affairs is an excellent choice. Mr. Wilkins, the first Negro ever to be named to a sub-Cabinet post, has a splendid reputation at the Chicago bar, to which he was admitted in 1921.

In August 1954, Time magazine reported that Wilkins “became the first Negro ever to attend a White House Cabinet meeting as the representative of a department.” Historian Jim Newton claims that “it was the first time an African-American ever attended a meeting of a president’s cabinet” at all.

Shortly after appointing Wilkins, Ike attended a meeting of the NAACP. On March 11, 1954, the New York Times reported that

President Eisenhower said he believed in President Lincoln’s statement that this nation was dedicated to the proposition that all men were created equal and with the writers of the Declaration of Independence that all men were endowed with certain inalienable rights.
There are vociferous minorities that do not hold to the concepts set forth by the Founding Fathers, the President said, and added: “But by and large the mass of Americans want to be decent, good, and just and don’t want to make a difference based on inconsequential facts of color or race.”

Eisenhower’s speech at the NAACP gathering, given only a few days after appointing Wilkins to the highest post ever occupied by an African-American, was a strong statement about how the Eisenhower administration would promote civil rights during the 1950s.

A few months later, on November 9, 1954, the New York Times ran an article under the headline, “President Picks Negro to Help Combat Job Discrimination,” reporting Eisenhower’s choice of James Nabrit to “prevent discrimination in hiring and dismissals in plants with Government contracts.”

Well known, of course, is Eisenhower’s September 1957 order to send the 101st Airborne Division to Little Rock, Arkansas, where the governor of that state, Democrat Orval Faubus, was obstructing the integration of schools. By that time, Ike’s record had clearly marked him a president who was promoting civil rights for African-Americans.

In that same year, Eisenhower worked to move the 1957 Civil Rights Act through Congress. Although some senators and representatives resisted it, and Senators Johnson and Kennedy diluted some of its provisions, Ike was adamant that it must pass.

Seeing that Johnson and Kennedy had weakened some aspects of the bill, Ike was not satisfied, and so later moved the more potent 1960 Civil Rights Act through Congress.

The 1950s were the decade in which the civil rights movement began and made most of its progress. Eisenhower was an integral part of that success.

Wednesday, December 2, 2015

Richard Nixon and the Politics of Race

By late 1968, the Democratic Party was at war with itself. The ‘hawks’ wanted to continue a full-blown war effort in Vietnam; the ‘doves’ wanted immediate and complete withdrawal of all United States military from the conflict.

The massive war effort, initiated by President Kennedy and expanded by President Johnson, was so closely tied to the identity of the Democratic Party that its chances of winning the 1968 presidential election were rapidly approaching zero.

In a last-ditch effort to change public opinion, the Democrats attempted to insinuate that Richard Nixon was less than enthusiastic in his support for African-American civil rights.

This effort backfired. Nixon’s public record included his efforts to round up votes in Congress, both for the 1957 Civil Rights Act, and for the 1960 Civil Rights Act. By contrast, both Kennedy and Johnson had opposed those two bills.

In an August 1968 televised commentary, William F. Buckley noted that

Mr. Nixon was backing civil rights bills way before John Kennedy was in point of historical circumstance.

Johnson, an unrepentant racist, would eventually be shamed into offering at least lip service to the 1964 Civil Rights Act. He did so on the basis of purely political calculations. Nixon, on the other hand, had supported civil rights legislation nearly a decade earlier, when it was less popular to do so.

It is unverifiable at best, and hazardous at worst, to speculate about a leader’s psychological motivations, but it’s worth noting that Nixon was raised in a Quaker household in California. Those two aspects of his heritage may have made him more willing to take unpopular stands. Buckley said that

The time to back a civil rights bill, you may have noticed, is as of the moment when it becomes popular. Up until that moment it becomes completely forgivable if you don’t do so. Lyndon Johnson is considered a great friend of the Negro people, but he voted against a whole series of civil rights bills over a period of years.

As Eisenhower’s vice president, Nixon’s legislative efforts had been noted by Black voters, who gave him a decent showing in the 1960 national elections. Buckley argued that, in the intervening eight years, there’d been no real change in Nixon’s allegiances:

Some 30 to 35 percent of the Negro people voted for Nixon in 1960. I think somebody ought to get around to telling us what it is that Mr. Nixon has done since 1960 that alienates those votes.

In 1968, a trend emerged which would later be called ‘identity politics’ or ‘the politics of identity.’ This strategy calls for candidates to appeal to voters, not as rational human beings who share the common needs and wants of all human beings, but rather as isolated groups: by race, by religion, by gender, etc.

Rather than assuming that voters are rational human beings who share the same desires for peace, prosperity, justice, liberty, and freedom, the tactic of ‘identity politics’ divides voters into demographic segments, and dictates that they should vote a certain way because they are men or because they are women, because they are African-American or European-American, because they are Jewish or because they are Christian.

This approach would come to dominate national electoral politics a few decades laters, but in 1968, it was in its infancy. Buckley noted that those who opposed Nixon

are trying very hard to mobilize all of the Negro votes on a racist basis. On the one hand, they tell us we shouldn’t treat people as simply members of a race, members of a group. On the other hand, they’re always trying to deploy them as members of a group, members of a race.

As it turned out, Nixon won by a large margin in November 1968 and became president. In hindsight, especially after the events of the Watergate scandal, it is difficult to see Nixon with the untainted view which the voters had of him at that time.

Not only did Nixon continue to effectively promote civil rights during his presidency, but he also ended the Vietnam war and ended the draft. Nixon effectively desegregated labor unions and integrated both schools and neighborhoods.

The Democratic Party’s self-destructive meltdown in 1968 hamstrung it for several years afterward, enabling Nixon’s easy reelection in 1972.